Commercial Leases - Case Update 2

DID YOU KNOW?

A. That a lease should expressly state a landlord's rights to demolish or change the rental philosophy of a shopping centre if the landlord wants to re-develop it?

B. That a landlord may have no obligation to maintain occupancy in a shopping centre.

C. That a tenant who wrongfully attempts to defeat a landlord's right of distraint may have to pay twice the value of the goods removed?

A. LANDLORD'S RIGHT TO DEMOLISH FOR REDEVELOPMENT:

The case of Michael Santarisieri Inc. et al vs. Unicity Mall Ltd., 26 RPR 3rd., 98 is a Manitoba decision involving tenants bringing an application for an interim and permanent injunction preventing a landlord from demolishing the Shopping Centre

Facts:

The landlord notified the tenants in an enclosed regional shopping centre of 560,000 sq. ft. of its plans to demolish the centre and replace it with a Power Centre consisting of free standing buildings/stores.

The Centre had a historically high vacancy rate and low level of productivity. The landlord purchased the property with the view to remodelling and re-configuring it to increase profitability. In August 1998 the landlord notified the tenants that the Centre would be demolished in early 1999. A number of tenants agreed to terminate their leases and some anchor tenants reached agreement with the landlord on termination and relocation in the new development. In February 1999 the landlord notified the remaining tenants that they will be relocated and that the Centre will be closed for re-development for six months in accordance with the terms of their leases.

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